If there were no huge state-owned enterprises in China, the effect of debt-to-equity swap might be better. However, inefficient state-owned enterprises engaging in debt-to-equity swaps are likely to lead to the survival of the fittest and inefficient allocation of social resources.
Question 2: What does it mean to reduce the leverage ratio of enterprises? Firstly, the term leverage is defined. My personal understanding comes from the concept of "financial leverage". When an enterprise is in debt, it supports a relatively large scale of operation with smaller equity assets, resulting in a "leverage effect". According to this logic, my understanding of "deleveraging" is that enterprises or business entities actively reduce the asset-liability ratio. If this understanding is fundamentally wrong, please pat the brick hard.
There are three levels of deleveraging: one is deleveraging, the other is financial deleveraging, and the third is corporate deleveraging.
I. * * * De-leverage * * De-leverage means reducing * * * debt. For China, the focus is on local debt. In fact, compared with the United States, Japanese and some European countries, China's overall debt is not high, and the need for deleveraging is not too urgent. The main problem is opacity, which makes * * * and banks feel uncertain. Therefore,
The first question has been discussed a lot in the economic circle, so there are different opinions. I won't judge without specific data, but one thing is clear.
The existing debt is a fait accompli, and the solvency of investment projects is the best. If there is no increase, we will look for funds from the national financial market. If it does not rise, it can only restructure the debt.
Of course, the best way of debt restructuring is not to divest several non-performing asset management companies like earlier, which is equivalent to the collective payment of the whole country, which is inefficient and unfair. Instead, it conducts credit asset securitization (CLO) for local financing platform loans and bank-related non-performing loans to attract investors to buy. Pessimistic investors can buy first, with low risk and low income. Optimistic investors can buy inferior products with high risks and high returns.
Regarding the second question, the most fundamental solution is to clarify the positioning of * * *, do something different, and establish standardized local debt and asset-backed securities (note that this refers to ABS in a narrow sense! Rather than CLO) distribution mechanism, so that real users and investors can meet directly to make good use of the increment. This is good for underwriters, such as banks and brokers.
As far as banks are concerned, deleveraging cannot be to reduce deposits. Now it seems that we can only reduce inter-bank business and off-balance sheet business. Banks are the biggest source of funds for the whole society, and their peers don't allow them to do it. Due to the financial pressure, it is impossible for all off-balance-sheet businesses to return to the table in a short time, so it seems that the capital cost of the whole society will rise. It is difficult to judge whether it is good or bad for the bank, because I don't know whether the interbank and off-balance-sheet business bring huge benefits or huge risks to the bank. Please give us your advice.
Some people think that securitization of credit assets is for financial deleveraging. Personally, it is a misunderstanding and should be a measure to transfer the credit risk of banks. Credit assets belong to bank assets, and the sale of assets will not reduce the leverage level of banks in any case, because it is essentially different from the source of funds at the debt end of banks. However, if CLO can be standardized and profitable, it can effectively transfer the debt risk. In the long run, this is really good for the banking industry. It should be noted that the development of CLO will bring credit lines to banks. If this part of the credit flow is not guided and controlled, it is likely that the funds will flow to the * * * financing platform. In this case, it is not conducive to deleveraging.
Question 3: How to reduce the leverage ratio of enterprises is the main content of supply-side reform. The State Council issued "Opinions on Actively and Steadily Reducing the Leverage Ratio of Enterprises" and its annex "Guiding Opinions on Converting Creditor's Rights into Equity Rights of Marketized Banks", which clearly stated that it is necessary to reduce the leverage ratio of enterprises in a market-oriented and legal way, carry out market-oriented debt-to-equity swaps, effectively prevent and resolve debt risks, and promote economic transformation and upgrading.
There are seven specific ways to reduce leverage, including promoting enterprise merger and reorganization, perfecting modern enterprise system, strengthening self-restraint, revitalizing enterprise stock assets, optimizing enterprise debt structure, orderly carrying out market-oriented bank debt-to-equity swap, implementing enterprise bankruptcy in accordance with laws and regulations, and actively developing equity financing.
Question 4: What does it mean to actively and steadily reduce the leverage ratio of enterprises?
The general idea of reducing leverage is to fully implement the spirit of the 18th CPC National Congress and the Third, Fourth and Fifth Plenary Sessions of the 18th CPC Central Committee, conscientiously implement the deployment of the Central Economic Work Conference and work report, adhere to a proactive fiscal policy and a prudent monetary policy orientation, and be market-oriented and rule-based. By promoting mergers and acquisitions, improving the modern enterprise system, strengthening self-discipline, revitalizing existing assets, optimizing debt structure, orderly carrying out market-oriented bank debt-to-equity swaps, going bankrupt according to law, and developing equity financing, we will actively and steadily reduce the leverage ratio of enterprises, promote supply-side structural reforms, deepen the reform of state-owned enterprises, promote economic transformation and upgrading, and optimize the layout, thus laying a solid foundation for long-term sustained and healthy economic development.
Question 5: What is the leverage ratio? The concept of financial leverage: no matter how much the operating profit of an enterprise is, the interest on debt and the dividend on preferred stock are fixed. When the income before interest and tax increases, the fixed financial expenses borne by each yuan of income will be relatively reduced, which can bring more income to ordinary shareholders. The influence of this kind of debt on investors' income is called financial leverage. Financial leverage affects the after-tax profits of enterprises rather than earnings before interest and tax. The financial leverage ratio is equal to the ratio of operating profit to pre-tax profit, which reflects the influence of financial expenses (interest) on the profits of insurance companies due to the existence of fixed liabilities. To some extent, it reflects the degree of corporate debt and corporate solvency. The higher the financial leverage ratio, the higher the interest expense and the lower the ROE index. Simply put, it is to enlarge your capital, so that your cost of capital will be small, and your risks and benefits will be enlarged, because the profit and loss percentage is not based on the original capital, but on the enlarged capital. When the Basel Committee on Banking Management drew lessons from the 2008 financial crisis and improved the New Capital Accord, it put forward the leverage ratio as a regulatory indicator, with a lower limit of 3%. Leverage ratio = core capital/off-balance-sheet total assets risk exposure One of the important reasons for the 2008 financial crisis is the excessive accumulation of off-balance-sheet leverage ratio in the banking system. The accumulation of leverage ratio is also a feature of previous financial crises (such as 1998 financial crisis). At the worst of the crisis, the banking industry was forced to reduce the leverage ratio, which amplified the pressure of declining asset value and further worsened the positive feedback cycle among losses, reduced bank capital base and credit contraction. Therefore, the Basel Committee will introduce the requirement of leverage ratio to achieve the following objectives: (1) Determine the bottom line of the accumulation of leverage ratio in the banking system, which will help alleviate the risks brought by unstable deleveraging and bring negative impacts on the financial system and the real economy. (2) Using simple and transparent indicators based on total risk as supplementary indicators of risk capital ratio provides additional protection against model risk and measurement error. The calculation of leverage ratio should be comparable among different economies, and the differences in accounting standards should be adjusted. The credit risk conversion coefficient of 100% will be applicable to some off-balance sheet items. The interaction between leverage ratio and venture capital ratio will be tested. The Basel Committee set the leverage ratio as a reliable supplementary measure to the requirements of venture capital, and put it into the first pillar framework on the basis of proper evaluation and calibration. 20 1 1 The China Banking Regulatory Commission issued the guidance on the implementation of new regulatory standards for the banking industry in China, and the leverage ratio of commercial banks should not be less than 4%.
Question 6: What is a leveraged enterprise? MM theory is a theory that can well reflect financial leverage. Divided into 1. There is also income tax, which tends to be net income theory. 2. There is no income tax, preferring the theory of net operating income. In the absence of enterprise and personal income tax, the value of any enterprise, whether it is in debt or not, is equal to the operating profit divided by the rate of return applicable to its risk level. Because the cost of equity will increase with the increase of debt level, the benefits brought by the increase of debt are completely offset by the increase of the cost of equity. Therefore, the value of an enterprise with the same risk is not affected by whether it has liabilities and the degree of liabilities. MM theory holds that under the condition of considering income tax, interests may be sheltered by tax, and the value of the enterprise will increase with the increase of debt, so the more debts, the greater the value of the enterprise and the more benefits the shareholders will get. Therefore, MM thinks that any capital structure has no influence on enterprise value. Leveraged enterprises mainly refer to enterprises that use liabilities.
Question 7: Why does the policy of reducing the leverage ratio of enterprises not affect economic development? It is because private enterprises have nowhere to borrow, and state-owned enterprises have long been unable to borrow!
Question 8: What do you mean by increasing the proportion of direct financing and reducing the leverage ratio? In fact, many enterprises have private financing in the early stage, but most of them are aimed at individual investors, so they are not included in the statistics of direct financing. The proportion of direct financing in the official sense is naturally low because the investment channels are too narrow. How many listed companies are there in Shanghai and Shenzhen GEM? Even with the three boards and property rights transactions in various places, how many are there? Other capital needs can only be met through indirect financing. How much is the bank loan? There are also trusts, bills, bonds and so on. . . . . . There is no comparability.
Question 9: What does corporate deleveraging mean in news reports? What is deleveraging? -the phenomenon under the financial crisis
Simply put, "leverage" refers to borrowing for investment and operation, and obtaining high returns with less principal. This model was adopted by many enterprises and institutions before the outbreak of the financial crisis, especially investment banks, with a high degree of leverage.
When the capital market is improving, the high income brought by this model makes people ignore the existence of high risks. When the capital market began to decline, the negative effect of leverage began to stand out, and the risk was rapidly amplified. For enterprises and institutions with excessive leverage, rising asset prices can make them easily get high returns, and once the capital price falls, the losses will be huge and exceed the capital, which will soon lead to bankruptcy. After the outbreak of the financial crisis, the risk of high leverage began to be recognized by more people, and enterprises and institutions began to consider "deleveraging" one after another, reducing debts by selling assets and gradually repaying debts. This process has caused the prices of most assets such as stocks, bonds and real estate to fall.
To sum up, "deleveraging" is a process in which a company or individual reduces the use of financial leverage. The trend of returning the original "borrowed" money by various means (or tools).
The "deleveraging" of a single company or institution will not have much impact on the market and economy. But if the whole market enters this process, most institutions and investors are forced or take the initiative to spit out the money borrowed by leverage in the past, then the impact is obviously extraordinary.
During the economic boom, the financial market was flooded with a large number of complex and highly leveraged investment tools. If most institutions and investors join the ranks of "deleveraging", these investment tools will be dissolved, the derivatives market will also shrink, and related industries will be hurt. With the sharp decrease of market liquidity, it will lead to economic recession.
Even some institutional investors believe that the United States will (soon) enter a large-scale deleveraging process, which will gradually spread to the real economy, leading to a recession in the United States, and the whole economic adjustment period may take ten years.
Question 10: What does financial leverage mean? Simply put, financial leverage means that you are doing several times that amount with a certain amount of money, just like the leverage principle in physics. For a simple example, futures have a margin system. Assuming that the deposit is 10%, you can copy 100000 yuan if you have100000 yuan in your hand.